Single Point of Entry for kiwifruit exporting - impacts on the New Zealand kiwifruit industry
This 2023 report investigates the benefits, costs, and barriers of the Single Point of Entry (SPE) arrangement for New Zealand kiwifruit.
Industry Alignment
Industry Alignment is the framework for our industry to prioritise and then work together to address the important challenges and opportunities in front of us. Its aim is to bring the industry together to maximise value, from orchard through to market, and to ensure growers can take part in an ongoing, transparent conversation on how we do that.
Key themes
Improved financials
Strengthening returns across all varieties, but particularly for Green growers and reducing fruit waste so we maximise the amount of fruit we sell.
Improved incentives
Aligning commercial incentives to our growing environment and customer expectations.
Future issues management
How we respond to the expansion of unauthorised Gold3 plantings in China, protect industry workers from exploitation, respond to climate change, and ensure offshore production supports our domestic industry too.
Greater ownership
Lifting grower shareholding of Zespri and increasing the number of growers owning a licensed variety.
Enhanced supply chain transparency
Including better reporting, industry decision making, more clarity and flexibility in supply agreements, and a clear strategy for supply chain infrastructure development.
How Zespri is responding
Part of our industry alignment work is identifying the workstreams to prioritise to ensure we’re focused on the areas that will add the most value for growers and deliver on these work programmes well. There will be significant grower engagement on some of these key issues in 2025 including share alignment and licence release. We’ll provide more information on these shortly, including how growers can engage in the process of designing solutions.
Notably, many of these issues were raised last year and there’s already a lot of work underway.
Improving industry decision-making processes
One of the key workstreams within the industry alignment framework is industry decision-making. This reflects feedback we’ve heard from many growers who want to better understand how decisions are made about industry policy, and consider whether this needs to be reviewed.
The primary objectives of this project are:
- To review and enhance the current decision-making processes of the Industry Advisory Council (IAC) and Industry Supply Group (ISG).
- To improve transparency and participation in industry decision-making.
- To ensure that industry policies are aligned with the needs and expectations of growers and other stakeholders.
While a major focus of our industry alignment work is ensuring we’re continuing to improve industry decision-making so that all growers have a voice in our industry’s future, there are times when industry representatives want to have decisions reviewed.
For growers, the first point of contact should be New Zealand Kiwifruit Growers Inc (NZKGI) who are the grower representative body. NZKGI advocate for all growers and provide a wide range of support and advice, including on what might be the best approach to raise issues with the Industry Advisory Council (IAC) or Industry Supply Group (ISG).
If growers have a complaint relating to the supply of fruit, they should discuss this directly with their registered supplier. Issues can also be raised with NZKGI and Zespri.
If growers feel that Zespri is not complying with the Kiwifruit Export Regulations, they should contact Kiwifruit New Zealand (KNZ) who are the regulatory body whose role is to ensure Zespri is meeting all of its regulatory requirements.
Registered suppliers also have a number of options available to them if they wish to review a decision as outlined in their supply agreements, with the ISG and IAC also in place to consider significant issues.
01
Phase 1: Stakeholder Consultation (2025)
Objective: To gather insights and feedback from growers, suppliers, and other industry participants on current decision-making processes and areas for improvement.
1 - Conduct surveys and interviews with key stakeholders.
2 - Organise focus group discussions and workshops.
3 - Analyse feedback and identify common themes and concerns.
02
Phase 2: Process review and improvement
Objective: To review the current decision-making processes of the IAC and ISG and identify opportunities for enhancement.
1 - Map out existing decision-making processes and workflows.
2 - Identify bottlenecks, inefficiencies, and areas lacking transparency.
3 - Develop recommendations for process improvements, including changes to voting mechanisms, meeting structures, and communication protocols.
03
Phase 3: Implementation and monitoring
Objective: To implement the recommended improvements and monitor their effectiveness.
1 - Develop an implementation plan with clear timelines and responsibilities.
2 - Conduct training sessions for IAC and ISG members on the new processes.
3 - Establish monitoring and evaluation mechanisms to track the impact of the changes.
4 - Gather ongoing feedback from stakeholders and make the necessary adjustments.
Expected outcomes
The successful implementation of this project is expected to result in:
- Enhanced transparency and inclusivity in industry decision making.
- More efficient and effective decision-making processes within the IAC and ISG.
- Greater alignment of industry policies with the needs and expectations of growers and other stakeholders.
The Industry Advisory Council (IAC) is a pan-industry body comprising of five representatives each from Zespri, NZKGI, and registered suppliers. It acts in the best interest of the kiwifruit industry as a whole and is tasked with considering significant pan-industry issues, including strategic industry policy, governance and structure, and provides recommendations to the Zespri Board and other industry groups.
Some of its scope includes reviewing matters previously dealt with by ISG, approving amendments to the Loyalty Agreement, approving variations and negotiations in the Supply Agreement, as well as reviewing the Enduring Funding Agreement and Zespri Segment Allocation Manual.
Decision making process:
Voting within the IAC is conducted in three electoral colleges representing each membership group. Each group functions as an "electoral college" and each IAC member has one vote. For a vote to pass, a majority of the members in each electoral college must vote in favor. Specifically, at least three of the five representatives in each group must support a recommendation for it to be approved.
Transparency and participation: IAC meetings are held bi-monthly and are open forums where growers and industry participants can attend or observe. Other groups may also be invited to provide additional information, subject to confidentiality requirements. Speaking rights are reserved for the designated representatives unless pre-agreed with the Chairman.
The Industry Supply Group (ISG) includes five representatives from Zespri, one representative from each of the 13 Registered Suppliers, and three grower-appointed representatives from NZKGI. Its function is industry and operational focused, including planning within the supply chain, insurance matters, reviewing the pooling process, rules, pricing and payments, and the negotiation of the industry Supply Agreement.
Decision-making process:
Most decisions within the ISG are made by consensus among the three parties (Zespri, Suppliers and NZKGI). However, if consensus cannot be reached, a recommendation must be supported by both Zespri and Registered Suppliers representing 70 percent of the industry's trays. A single supplier representing 30 percent of the trays cannot veto a recommendation supported by all other suppliers.
- Kiwifruit New Zealand (KNZ) has three key functions to issue export authorisation to Zespri, monitor and enforce mitigation measures, and regulate collaborative marketing.
- New Zealand Kiwifruit Growers Incorporated (NZKGI) is a grower advocacy body for the kiwifruit industry.
- Kiwifruit Vine Health (KVH) manages biosecurity readiness, response and operations.
- Organic Kiwifruit Growers Association (COKA) and the Organic Management Committee (sub committee of COKA) represent the certified organic kiwifruit category.
Other workstreams
Highlights of some of the progress we’ve made on our other workstreams include:
Developed off the back of significant industry consultation in 2023, the shareholder alignment programme has established three key goals and targets outlined in the table below which are guiding our work.
| Goals | Targets |
|---|---|
| Improve the percentage of New Zealand growers that own Zespri shares (going wider) | At least 75 percent of New Zealand growers are Zespri shareholders by 2030 |
| Improve shareholder alignment (going deeper) | At least 60 percent of New Zealand growers hold shares at a ratio of between 0.5 and 2.0 shares per tray of production by 2030 |
| Seek to minimise shareholder dilution, and utilise freshly raised capital to facilitate the buy-back of ‘dry’ and over 6:1 cap shares | The percentage of dry shares, and shares above the 6:1 cap, are below five percent by 2028 |
Following support from the Industry Advisory Council (IAC) as part of our Industry Alignment framework, Zespri is proceeding with two initiatives designed to strengthen its grower shareholding.
- Initiative one: Growers will be offered the opportunity to receive their June loyalty payment (relating to our 2024 harvest season) as shares.
- Initiative two: Growers will have the ability to reinvest dividend payments as shares.
These initiatives will be available each year from 2025, and are designed to provide growers with an opportunity to increase their shareholding without needing to commit a significant upfront outlay of cash in buying shares.
Read more about these initiatives on our Share Alignment page here.
- Optimising value from markets – driving market performance through brand-led demand and optimising allocations so that we can maintain premium pricing.
- Increasing productivity – Better yields per hectare and delivering strong value for fruit.
- Managing costs - Identifying and reducing excess costs within our control, including quality costs.
- Changing the playing field - Innovating to stay ahead of the game with improved product experience and efficiency
- Annual Green Grower Town Halls to support greater engagement with green growers. Watch the recordings from the Green Grower Town Hall we held in October 2024 here.
- Significant engagement regarding Zespri Global Supply (ZGS), its role in Zespri’s 12-month supply strategy, and its importance in protecting grower returns
- Industry tours to visit European growers and learn more about ZGS operations and performance
- Increased visibility of ZGS operations and performance, including a dedicated section in the 2024 Five-Year Outlook
- Confirmation of the Producer Vote seeking grower support for the expansion of offshore SunGold hectares as part of a wider plan to reach 12-month supply with key customers in key markets, maintaining our volume share and therefore our value proposition, ultimately supporting our price premium.
Read more about ZGS and it's expansion to support New Zealand grower returns here.
- Focus on resetting fruit quality to ensure we sell as much as we can of what we grow, with fruit quality this year the best in 5 years
- New digital systems give us unprecedented ability to monitor fruit quality and manage inventory to prioritise selling softer fruit to reduce quality costs
- Markets exploring process options such as infused teas where these make commercial sense.
- Established Kiwifruit Breeding Centre to develop new varieties faster
- 13 new varieties including kiwi berries in pre-commercial trials (the final part of the trial process before commercialisation)
- New ascending auction licence release mechanism and Green cutover pool
- Discussion on new licence release mechanism to begin in 2025, considering alternatives to the current up front cost. Read more about the 2025 licence release rules and how to buy licence here.
We regularly release surveys for growers through the independent research agency Primary Purpose. Beyond our day-to-day engagement with growers, these survey's are an important way for us to get a better sense of what’s on growers’ minds, and to hear from more growers, including the various perspectives on what the big issues are we’re facing as an industry, how we can address these and what we can do better at Zespri.
Our most recent round of research at the start of the year indicated there’s growing optimism within the industry following a challenging couple of seasons.
A total of 71% of growers told us they’re confident in the future of the industry, up from 64% in November. A total of 6% were not confident, and we need to ensure we focus on delivering high-quality fruit, managing costs and returning as much value as we can from the markets to support all growers.
We’ve had positive feedback on the creation of our shed talks, the changes in the licence release system, and our focus on increasing grower shareholding in Zespri and lifting Green OGRs. While we are pleased with the improvement in sentiment, we know there is still work to be done, so it is really important that growers continue to participate in these short surveys so we can track our progress and make changes where needed.
We’ve also heard that there’s a real desire for us to look at how we can provide better assistance in helping growers with compliance requirements – particularly around the provision of improved online tools to assist with GLOBALG.A.P. We’re already underway on assessing what we can do in this space and you can expect to hear more on this in the coming months.
Zespri continues to monitor the estimated scale of plantings of unauthorised Gold3 in China, including assessing the extent of these plantings following the latest grafting window.
A 2024 commissioned report on the estimated hectares by region, production volume and orchard pricing / kg of G3 in China has found that overall the G3 planted area has ncreased by about 6% to 8,370 Ha, while production is estimated to be 40m TEs an increase of approximately 23% as orchards mature. The key growing hub around Chengdu (primarily Pujiang/Qionglai) accounts for about 63% of the G3 planted area and possibly 75% of production.
Zespri continues its legal action against unauthorised producers and distributors of Gold3, including the civil case in the Intellectual Property Court in Nanjing, China.
Enforcement action
As part of ongoing legal activity to protect the Zespri brand, Zespri has recently completed successful prosecutions against three individuals in China for the online sales of locally grown fruit with counterfeit Zespri labels to the value of more than NZ$700,000.
The offenders were each sentenced to three years and nine months in jail and ordered to pay a fine of 550,000 yuan (NZD 125,000).
The prosecutions reflect a local crackdown on those involved in counterfeiting registered trademarks, effectively safeguarding corporate trademark rights, and protecting consumer interests. They follow a series of police raids against sellers buying local kiwifruit to sell through stores set up on an e-commerce site earlier this year.
The manufacturers and vendors of the counterfeit trademark labels supplied to the convicted trio have also been charged and that case is ongoing. The Shanghai Public Prosecutor and the Zespri team in China have both issued press releases on the successful anti-counterfeit operation and the heavy penalties imposed which has been widely reported in Chinese media, serving as a powerful deterrent.
Civil case
Zespri has also filed further legal action to recover damages from those involved in the propagation of Gold3 plantings as part of our commitment to protecting the industry’s investment and intellectual property rights.
Zespri has filed a petition in a Chinese court to recognise and enforce the judgement of the New Zealand Court of Appeal against those found to have taken the original budwood out of New Zealand to China. This is in order to recover remaining damages from the $12 million awarded to Zespri after Haoyu Gao and his associates were found guilty of fraudulently offering to license Zespri varieties to parties in China and facilitated the planting of these varieties on Chinese orchards.
Our civil litigation case in the Intellectual Property Court in Nanjing against two defendants linked to the unauthorised production, sale, and marketing of illegally grown G3 is also continuing. We have been encouraged by the recent success of T&G’s plant variety rights infringement civil case in China, related to the illegal growing of its Envy apple variety. T&G was awarded its full claim for damages in the case, with the case demonstrating the increased protection for PVRs made possible by changes to China’s Seed Law in 2022. Late last year, T&G celebrated the first sales of its locally grown Envy Apples in China, following an agreement reached in 2018 that granted Joy Wing Mau a licence to grow and sell managed volumes of Envy apples to the local China market.
October 2024 Update
Zespri’s civil case in China to address unauthorised Gold3 plantings is continuing and will be transferred to the Wuhan Intermediate People’s Court.
The Wuhan Intermediate People’s Court is an experienced intellectual property court and has heard numerous cases relating to plant variety right infringement.
It is anticipated the court will issue an initial judgement within 12-months.
The civil case, filed in July 2023, is a significant step in our ongoing efforts to protect the investment made by New Zealand producers in licensed kiwifruit varieties, as well as the interests of our customers and consumers. We will continue to keep the industry updated as the civil case progresses.
Related documents
Related pages
Was this page helpful?
Thanks for your feedback!